Thursday, November 27, 2008

Another Reason why The Economist Rocks

Nothing quite like the sarcasm and wit of the editorial board of The Economist. In a leader (November 15, "O give me a home...") discussing the possibility of the Maldives looking to buy a new homeland, as the country looks likely to be a casualty of rising sea levels, the editors expand the discussion to include the U.S.:
And Barack Obama, committed to uniting America, could defuse the nation’s culture wars by purchasing an alternative homeland for those of his countrymen who want more use of the death penalty, less gun control and no gay marriage. A slice of Saudia Arabia’s empty quarter would do nicely: there’s plenty of space and the new occupants would have lots in common with the locals.

Sunday, November 23, 2008

The Future of the "Bolivarian Revolution"

I highly recommend watching the Frontline program "The Hugo Chavez Show" showing this week on PBS. In addition to demonstrating why government efforts to control the commanding heights of the economy are utterly doomed to inefficiency and failure -- it showcases how an elected official can effectively use modern communication methods to build his brand and craft his public image to one's core coalition.

The history of this beautiful country is incredibly tragic. Unfortunately, I believe in the next two years a new monumental chapter of sorrow is about to unfold. The precipitious drop in the price of oil has left Chavez with serious financial difficulties and the inability to continue buying off support from the poor. As his popularity decreases with the public, and former allies turn against him, I fear the methods Chavez will resort to in order to preserve power and enact the "Bolivarian Revolution."

Wednesday, November 19, 2008

The Politics of Fear

I have noticed that individuals pushing an issue agenda keep using fear to advance their narrative in the public's consensus. While there is evidence that fear and negative campaigning does indeed work to elect candidates into office, I do not think this is an effective method to increase public recognition of a political cause or empower a larger minority to demand change. Furthermore, I think ridiculous projections and/or talking points reduce one's ability to grow their coalition and damages the efforts by many who are working to actually achieve progress on the cause.

I'm going to take two examples to illustrate my rationale: radicals in the environmental movement (this post) and the U.S. right-wing campaign against socialism (future post TBD).

Knowing that an individual has said the following statements over the years do you really think that he is an effective messenger to increase the environmental movement's coalition?
  • "the battle to feed all of humanity is over ... In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now" (1968);
  • "India couldn't possibly feed two hundred million more people by 1980" and "I have yet to meet anyone familiar with the situation who thinks that India will be self-sufficient in food by 1971" (1968);
  • "I would take even money that England will not exist in the year 2000" and "'Smog disasters' in 1973 might kill 200,000 people in New York and Los Angeles" (1969);
  • "in ten years all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish" (1970);
  • "before 1985, mankind will enter a genuine age of scarcity . . . in which the accessible supplies of many key minerals will be facing depletion" (1976);
  • "by 1985 enough millions will have died to reduce the earth's population to some acceptable level, like 1.5 billion people" (1969);
  • "by 1980 the United States would see its life expectancy drop to 42 because of pesticides, and by 1999 its population would drop to 22.6 million" (1969);
  • "actually, the problem in the world is that there is much too many rich people..." (1990);
  • "giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun" (1992); and
  • "we've already had too much economic growth in the United States. Economic growth in rich countries like ours is the disease, not the cure" (1990)
The answer is clearly a resounding NO!!! I was catching up on some podcasts recently and listened to a Science Friday's from August entitled "Mass Extinction Event on the Horizon?" Host Ira Flatow was interviewing the man responsible for the previous statements... Paul Ehrlich.

Now I strongly consider myself an environmentalist. I believe public policy in regards to the environment must incorporate not only the needs of humans, it must take into consider the interests of plants and animals as we do in fact SHARE this planet with them.

However, it blows my mind why anybody takes Ehrlich seriously or would give him a platform to spew his nonsense... unless they are against growing the global coalition to take public policy measures to combat climate change and pollution caused from human activities. Ehrlich had the audacity to claim:
  • "the United States is going to be 439 million people by 2050. That's roughly 300 million people more than anybody has ever given a reason for having alive in the United States at one time";
  • "I think people need to be scared (of future environmental devastation)... Fear ought to be a big incentive now if we care anything about our children or grandchildren world" (Paul, fear doesn't work if you have 0 credibility);
  • "we don't even have a population policy! In the United States we argue about immigration policy without having a population policy. It's kind of like designing an airplane that can load 100 people a minute and when you say how many should it fly and you say well don't worry about that just design a plane that will load 100 people a minute." (Seriously? First off, government doesn't belong in the bedroom!!! Beyond that, Paul has consistently ignored evidence showing that as economic material well-being goes up, birthrates go down & the role technology can and will play to produce goods consumers want far more efficiently.)
This nonsense and tactical advise does not and will not convince anybody who is not a part of the growing environmental coalition to join -- it only reduces the credibility of the movement as a whole and damages the credibility and validity of the environmental brand. For the sake of the planet, please stop giving Ehrlich anymore media opportunities to tarnish the hard fought gains the environmental movement has made with the American and global public.

Tuesday, November 18, 2008

Why I am against the Proposed Bailout of the Big Three

Reposting my thoughts I e-mailed to a few friends the other day. The remarks in quotations are statements from a really good friend of mine.
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"No other industry has been similarly crippled because external circumstances - fuel prices - don't have such a major effect on the health of any other industry."

Fuel prices are NOT the reason the American auto industry is having problems. That is an absurd argument. Why are Toyota, Honda and other foreign manufacturers still in the black? The foreign companies have achieved profitability in America mainly by setting up their factories in Southern and border states where they could avoid the UAW, and thereby introduce efficient methods of production.

"The automakers also rely heavily on loans and bonds to operate; the complete collapse of the credit market was another factor beyond their control."

Not really. Only a couple of years ago, GM was paying $5 billion per year in health benefits to retirees and current employees. The UAW was intent on saddling GM, Ford and Chrysler with absurdly high benefit liabilities knowing if all else failed government would pick up the tab.

There is a reason foreign automobile companies have easier access to credit -- they are simply run better and limit the power unions have.
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Back to the principle point at hand.... why bankruptcy is the needed cure and why the bailout is a bad idea.

Bankruptcy Needed

1. Bankruptcy would help GM and Ford become more competitive by allowing them to rip up significant parts of their labor contracts with the UAW. Allowing the big three to dramatically reduce their health care liabilities to past and present workers and reduce the wages of current workers would lead to dramatic cost savings. I doubt this is possible without declaring bankruptcy.

Here is an analogy for you... United Airlines. By entering bankruptcy it was able to reduce its inflated cost structure by breaking contracts it had with the pilots union and other employee unions. It exited bankruptcy a slimmer and more efficient airline. Although it remains to be seen if UA can still survive, it is in much better shape to compete than before it entered bankruptcy.

2. Bankruptcy would force a massive reorganization. The current management would be forced out and allow the firms to reorganize and become more productive and efficient firms.

Why Bailout Bad

1. A bailout of the big three without forcing fundamental change in how these firms are managed will only result in another round of $25-$50 billions checks in the very near future. It is simply a terrible idea to simply write a check to the auto industry without demanding major, major restructuring of its labor contracts. Without that the money will simply go down a rat hole and the automakers will just be back again in a year or two asking for more money. Why should we as taxpayers subsidize a business model imposed on the big 3 by the UAW that is fundamentally not feasible?

The Democrats need the mid west for political power, and rely on the UAW and other unions to get out the vote. No way are the Dems going to get the needed massive concessions out of the UAW to allow the Big 3 to be able to compete without subsidies against foreign car companies that are profitable without massive government subsidies.

2. Government is inherently bad about picking economic winners and losers. Rewarding political patronage and enhancing electoral power is more important than creating a viable profitable business.

3. What is the objective of the bailout? To save jobs? At least with the bailout of the financial sector we have an objective of keeping banks capitalized enough where they can continue to lend money. Pretty straightforward.

We just don't have any good blueprint for what we want them to do!!!
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"what matters is getting the policy right so that we don't put too many people out of work, on the one hand, or waste the government's money on the other."

I would argue that a bailout in of itself is a waste of taxpayer money. Government should not be in the business of deciding economic winners and losers -- that my friend is socialism.
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Bottom line is Detroit needs to dramatically cut production, wages and health care costs.

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Thursday, October 30, 2008

The Media's Change of Guard

I thoroughly enjoy the political e-mail conversations/debates I have with three good friends of mine growing up. Two I would consider very liberal, the other pretty conservative (of the Heritage Foundation ilk). After a conversation on whether or not O'Reilly and Hannity have any intelligence I decided to retort with a longer response on the future state of the media. The piece is unedited and very raw, yet I thought I would share it here as it may be of interest to some.

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Looking at the current media environment I think partisan media will only grow. If you look at communications and media historically partisan and opinionated news sources dominated. The period between WWII and the 2000 elections, where the ethics and standards of journalism was held in the upmost esteem, was a historically anomaly. This period was possible due to the incredible profit margins the networks, print and radio outlets had as the cost of distributing information went radically down due to new technologies (broadcast and print ad revenue with a growing affluent readership).

The profit margins are gone. Technology has grown so rapidly it has enabled an entire new medium of communication that is free to deliver -- the internet. Not only is it free it is incredibly fast. Why would I pay and wait for information when I can get it free and quicker online?

Daily newspapers are simply fucked. They will never make up the ad revenue online. The transaction cost for people to search for favorite sources of information online is very minimal. People will naturally look for information that conforms to their world view as it provides greater satisfaction. For evidence not only have the daily circulation numbers crashed, the New York Times corporate debt is now rated as junk and the Christian Science Monitor dropped its daily print edition and became a weekly. If a non-profit can't make it times are really bad.

With those will go the high standards for journalism, unfortunately. Newspapers especially will be in a desperate search to preserve market share, if they survive at all. Rebranding oneself as a paper that "thinks like I do" may be their only salvation outside of some of the elite papers (WSJ, Financial Times, New York Times).

Welcome to the new era of tabloid, partisan journalism. Our only salvation is more sites like TPM and similar right-wing sites find a new audience that is willing to pay for investigative journalism.

Furthermore...

The better question here is what does this mean for democracy? As communities grow more uniform (Santa Barbara elite liberals, suburban Orange County conservative), is the nature of bipartisanship essentially doomed? Don't blame the politicians -- blame the voting public!

My biggest concern here is that people stop thinking analytically on how to best solve problems and resort to familiar political rhetoric to feel they belong to something. A spirit of bipartisanship leads to better solutions as people are forced to negotiate out of their often narrow political convictions.

Friday, October 3, 2008

Bloomberg 2012

I think there is a real possibility Mike Bloomberg will be our first Jewish POTUS in 2013. Although this sounds rather absurd at first hear me out:

1. We are on the brink of a severe recession. Opinions range from the extremely pessimistic Nouriel Roubini, who recently stated “we are literally one step away from collapse of entire financial system and even the corporate system," to Warren Buffett, who told Charley Rose this week "in my adult lifetime I don't think I've ever seen people as fearful, economically, as they are now... The economy is going to be getting worse for a while." Even Goldman Sachs came out with a report this week stating the recession will be "significantly deeper" than expected and the unemployment rate will rise to 8 percent by the end of the year (the current rate is 6.1 percent). Scary, scary stuff.

2. President Obama -- yes he is going to win -- will be facing a horrible political situation. The promised government programs he is campaigning on right now are not going to happen. We will not have the money. How much more can we borrow from foreign creditors -- especially if the current bailout does not work? Obama will probably move forward reregulating the economy, which will hinder our countries ability to grow out of the impending recession.

3. Voters in 2012 will truly be looking for change. I believe voters will blame the GOPpers for getting us into the impending severe recession and will be impatient with Obama as his public policies fail to turn around the economy. Voters will be looking for systematic change -- not just a change in parties. By self-financing his campaign as an indepedent Bloomberg will be able to brand himself as a economic expert not beholden to corporations or unions.

The base of the Democratic Party will end up taking the party and Obama too far left in the next four years, creating a nice sweet spot for Bloomberg to run as a true centrist. The American public, as much as many progressives don't want to admit this, will not vote for a FDR big government liberal -- even in the case of a severe recession. Of course voters will tilt leftward when voting for the POTUS in such a scenario. However, the American public has changed significantly since 1932. Not only is stock ownership more widespread, we have the example of the Soviet Union to demonstrate that government does a horrible job of trying to "manage" the economy.

Thursday, October 2, 2008

Biden/Palin IV

Overall: Considering how low expectations were of Palin she did alright. Biden completely won the debate on policy and knowledge, yet Palin may come out ahead because she didn't completely embarrass herself -- she didn't leave the podium crying that the "elite media" was out to get her.

Ifill did an awful job moderating the debate. She asked horrible follow up questions. It seemed like she was scared of coming across as out to get Palin than she clammed up for 90 minutes.

Observations 70-120 minutes:
- Biden killed the question on how he would be different than an Obama adminstration. Great job.
- "Team of mavericks." 'God' help us all if Palin becomes POTUS.
- Palin completely bullshitted her way through education. She said absolutely nothing of substance.
- I'm glad to see Biden took on McCain's maverick status head on with 7 minutes left. This was the most important moment of the debate IMHO.

Biden/Palin III

Foreign Policy Bottom line: Biden, by essentially debating with McCain and not Palin, just destroyed the Alaskan governor in the foreign policy part of the debate. In fact, Palin looks ridiculous when talking about foreign policy. It is simply incredible just how unbelievably unprepared she is to be the VP. Unreal...

Observations (Foreign Policy)

- Biden did a great job communicating the Dem ticket's Iraq policy. Dude is en fuego 47 minutes in.
- She is obsessed with talking about Israel. Governor, you realize there is more to U.S. foreign policy than Israel? Right....?
- 20 minutes in and Palin finally gets a hit. Calling Biden out for voting for the war prior to being against it. "America craves straight talk."

Policy (Foreign Policy)
- Palin has no policy thoughts here beyond talking points (which I doubt she really understands). Thus I have little say here.
- Biden is spot on the Ahmadinejad does not control Iran -- the mullahs do. In fact,
Ahmadinejad is not even in the top 15 most powerful political figures in the country.
- Wow, that is incredible. Three weeks of funding Iraq is equal to 7 years in Afghanistan. That is incredible. The most suscinct point I have ever heard how the current POTUS completely took his eye off the ball.

Biden/Palin II

Thoughts 15 minutes through 45 minutes (Domestic Issues)
- Great job by Palin to call out Biden's stupid comment that the rich paying higher taxes is "patriotic."
- Palin must be either on speed or chugged a gallon of coffee before the debate. Not only is she speaking super fast, every time they show her legs she can't stop moving.
- "Ultimate bridge to nowhere." This line had more potential yet Biden should have slowed down his tempo before unleashing the comment.
- Biden is coming across as a 19th century populist. Granted, I've never been a fan of his big-government beliefs. However, playing this role allows Obama to seem more centrist and safe to the white U.S. electorate.
- 24 minutes in. Palin addresses her own limitations head on by saying "I've only been at this five weeks and haven't promised anything..." Effective response.
- Check out CNN vs. PBS on HD. Palin and Biden look much better on PBS. Both have a darker tone on PBS, real bizarre. Besides, CNN has too much crap going on on the screen in HD.
- Palin is settling down 30 minutes in. She looks real confident and secure talking about an issue (one of the only issues) she knows about... drill baby drill?
- However, she clearly knows little about climate change. I think this is Biden's best moment in the debate so far. Dude has a mastery of this issue and has a great response to Palin.
- Interesting Palin brought in a comment where Biden mentioned rape. That's a bit aggressive.

Policy
- Biden on taxes... "it's fairness." No Joe, a taxation system should not be about "fairness." It should be about collecting revenues as effeciently as possible with as little damage to the economy as possible.
- Palin seems to believe that man's activities is not the primary driver behind climate change. Seriously Governor? She is incredibly weak on this issue. Just wow.
- "Clean green natural gas." Really Governor? Nice eyebrow raise. Althought it is better than coal, it is hardly clean nor green.

Biden v. Palin I

Bottom line: Palin is effective so far connecting as "somebody like me" -- which is really underrated in all communication plans.

Background
- I still don't believe Gwen Ifill didn't disclose to the McCain campaign that she was writing a book that included Obama in the title that was to be released on inauguration day next year. Full disclosure? Ifill clearly believes this applies to the people she covers.

Thoughts through 15 minutes
- Palin looks great in black.
- What's up with Biden's eyes? It looks like the make-up job stopped short of his lower eye lid. Bizarre
- Palin looks more confident than I thought she would 8 minutes in. Nice wink after responding to Biden's call out of McCain's comments that the economy remained strong.
- She is speaking way, way too damn fast. Still is still a little -- no very -- nervous.

- Does anybody really care what Biden is saying? Everybody is far more interested to see if Palin implodes.